The committee is responsible for passing appropriation bills along with its Senate counterpart.[1] The bills passed by the Appropriations Committee regulate expenditures of money by the government of the United States. As such, it is one of the most powerful of the committees, and its members are seen as influential. They make the key decisions about the work of their committees—when their committees meet, which bills they will consider, and for how long.

The constitutional basis for the Appropriations Committee comes from Article one, Section nine, Clause seven of the U.S. Constitution, which says

No money shall be drawn from the treasury, but in consequence of appropriations made by law; and a regular statement and account of receipts and expenditures of all public money shall be published from time to time.

This clearly delegated the power of appropriating money to Congress, but was vague beyond that. Originally, the power of appropriating was taken by the Committee on Ways and Means, but the United States Civil War placed a large burden on the Congress, and at the end of that conflict, a reorganization occurred.

The Committee on Appropriations was created on December 11, 1865, when the U.S. House of Representatives separated the tasks of the Committee on Ways and Means into three parts.[2] The passage of legislation affecting taxes remained with Ways and Means. The power to regulate banking was transferred to the Committee on Banking and Commerce. The power to appropriate money—to control the federal pursestrings—was given to the newly created Appropriations Committee.

The root of the Appropriations Committee's power is its ability to disburse funds, and thus as the United States federal budget has risen, so has the power of the Appropriations Committee. The first federal budget of the United States, in 1789, was for $639,000—a hefty sum for the time, but a much smaller amount relative to the economy than the federal budget would later become. By the time the Appropriations committee was founded, the Civil War and inflation had raised expenditures to roughly $1.3 billion, increasing the clout of Appropriations. Expenditures continued to follow this pattern—rising sharply during wars before settling down—for over 100 years.

Another important development for Appropriations occurred in the presidency of Warren G. Harding. Harding was the first President of the United States to deliver a budget proposal to Congress.

In May 1945, when U.S. Representative Albert J. Engel queried extra funds for the Manhattan Project, the administration approved a visit to CEW (and HEW if desired) by selected legislators, including Engel, Mahon, Snyder, John Taber and Clarence Cannon (the committee chairman). About a month earlier Taber and Cannon had nearly come to blows over expenditure. But after visiting the Clinton Engineer Works at Oak Ridge Taber asked General Groves and Colonel Nichols "Are you sure you’re asking for enough money? Cannon commented "Well, I never expected to hear that from you, John."[3]

In the early 1970s, the Appropriations Committee faced a crisis. President Richard Nixon began "impounding" funds, not allowing them to be spent, even when Congress had specifically appropriated money for a cause. This was essentially a line-item veto. Numerous court cases were filed by outraged interest groups and members of Congress. Eventually, the sense that Congress needed to regain control of the budget process led to the adoption of the Congressional Budget and Impoundment Control Act of 1974, which finalized the budget process in its current form.

The Appropriations committee is widely recognized by political scientists as one of the "power committees,"[citation needed] since it holds the power of the purse. Openings on the Appropriations committee are often hotly demanded, and are doled out as rewards. It is one of the exclusive committees of the House, meaning its members typically sit on no other committee. Under House Rules, an exception to this is that five Members of the Appropriations Committee must serve on the House Budget Committee—three for the Majority and two for the Minority. Much of the power of the committee comes from the inherent utility of controlling spending. Its subcommittee chairmen are often called "Cardinals" because of the power they wield over the budget.

Since Congress is elected from single-member districts, how well the member secures rewards for his or her district is one of the best indicators as to whether or not he or she will be reelected. One way to achieve popularity in one's district is to bring it federal spending, thus creating jobs and raising economic performance. This type of spending is often derided by critics as pork barrel spending, while those who engage in it generally defend it as necessary and appropriate expenditure of government funds. The members of the Appropriations committee can do this better than most, and as such the appointment is regarded as a plus. This help can also be directed towards other members, increasing the stature of committee members in the House and helping them gain support for leadership positions or other honors.

The committee tends to be less partisan than other committees or the House overall. While the minority party will offer amendments during committee consideration, appropriations bills often get significant bipartisan support, both in committee and on the House floor. This atmosphere can be attributed to the fact that all committee members have a compelling interest in ensuring legislation will contain money for their own districts. Conversely, because members of this committee can easily steer money to their home districts, it is considered very difficult to unseat a member of this committee at an election—especially if he or she is a "Cardinal".

In 2007, the number of subcommittees was increased to 12 at the start of the 110th Congress. This reorganization, developed by Chairman David Obey and his Senate counterpart, Robert Byrd, for the first time provided for common subcommittee structures between both houses, a move that both chairmen hoped will allow Congress to "complete action on each of the government funding on time for the first time since 1994".[8]

The new structure added the Subcommittee on Financial Services and General Government, and transferred jurisdiction over Legislative Branch appropriations from the full committee to a newly reinstated Legislative Branch Subcommittee, which had not existed since the 108th Congress.